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Senate Approves Bill To Reform No-Fault Auto Insurance In Michigan

May 07, 2019 - 1:29 pm
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LANSING (WWJ) - Legislation that supporters say would lead to insurance savings for Michigan drivers has been approved by a State Senate. 

Under the current no-fault system, Michigan has the highest auto insurance rates in the nation -- about $2,400 per year on average, which is nearly $1,000 above the national average. Michigan is also the only state that requires seniors to buy duplicative coverage, costing them between $600 and $1,000 each year.

The Senate on Tuesday voted 24 to 12 in favor of the legislation, which would eliminate a requirement that drivers buy unlimited medical benefits to cover crash injuries.

“I introduced Senate Bill 1 in January because this has been an unsolved problem for too long,”  Sen. Aric Nesbit (R-Lawton). “Since then, we have held hours of committee meetings and heard testimony from all parties who are involved in the current system. I think we have a good idea of where changes need to be made and how we can start providing some much-deserved relief to motorists.”

WWJ's Lansing Bureau Chief Tim Skubick said only two Democrats sided with Republicans.

Why?

"Here was the major dispute: The Democrats voted no for the most part because they said there was no guarantee that there would be any savings for any motorists in the state under this so-called reform plan," Skubick reported. 

While this legislation does not set specific rates, Nesbitt said what it would do is provide drivers with more choice in their level of coverage; with an option for people age 62 and older with lifetime health care benefits to not carry certain coverage. 

This, Nesbitt said, would mean big savings for some people. 

"Somebody who doesn't have comp (comprehensive) and collision on their insurance policy, and let's say they're on a fixed income and they're an 80-year-old senior, they'd just use their Medicare, their health insurance, and they want to do a real PLPD policy, they could probably save upwards of 80 percent," Nesbitt said.

Some Democrats, who complained they had any input on the proposal, said they feared this plan would save insurance companies money without helping consumers. 

As the legislation does not indicate how much, if any, drivers would save, Sen. Erika Geiss (D-Taylor) wonders where Nesbitt is getting his numbers. 

"You talked about percentages on the savings, and it's not in the bill," Geiss said. "That language isn't in the bill...what the savings would be with these various choices that are being offered."

The legislation will now go before the State House for consideration.